According to a recent news from the Chinese Ministry of Commerce, the European Union issued an official announcement to initiate an anti-circumvention investigation of China's re-exported fastener products exported from Malaysia. As the industry's stakeholders worry, a new round of trade friction between China and the EU will come. Following the anti-dumping and countervailing investigations, this time the EU used anti-circumvention investigations for Chinese products.
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China's product exports are struggling
The EU said that since the EU officially imposed anti-dumping measures on fasteners originating in China since January 31, 2009, the export routes of related Chinese products have changed significantly, and the number of products transferred to the EU market through Malaysia has increased and is in the European market. Continued low-cost dumping has seriously weakened the effectiveness of current anti-dumping measures. As the world's largest manufacturer of fasteners, China is in the stage of rapid industrial development in recent years, and its independent innovation capability is steadily improving. There are nearly 10,000 domestic production and trading companies, contributing more than 100 jobs. In November 2008, the EU began an anti-dumping investigation on fasteners exported from China to the EU. On January 31, 2009, the EU officially took anti-dumping measures against Chinese fasteners and imposed an anti-dumping duty of up to 87%. On December 3 of the same year, the European Commission decided to impose a formal anti-dumping duty of up to 87% on steel fasteners imported from China with a result of 14 countries' approval, 12 oppositions, and 1 country's abstention.
The EU is the main market for China's fastener exports, and the EU's anti-dumping measures have severely hit the Chinese fastener industry. In 2009, affected by the EU's 87% punitive tariffs, nearly 900,000 tons of fastener products in China could not be exported. The export of the whole industry fell by 43% year-on-year. The equipment utilization rate of fastener manufacturers also changed from the previous 84% once dropped to around 70%. Coupled with the fact that foreign manufacturers are willing to step up their efforts to seize the Chinese domestic market by dumping, the domestic fastener industry has been greatly impacted and challenged. At present, one third of the enterprises in the industry have stopped production, and one third of the enterprises are in a semi-discontinued state. "If this investigation is finally established, we are likely to lose the European market again, and the company is bound to suffer significant losses." A person in charge of a fastener manufacturer in Jiangxi Province told the author.
Through interviews with a number of Chinese fastener manufacturers, the author learned that it is a helpless move for Chinese companies to transfer Malaysia's products to the EU. In order to re-enter the EU market, Malaysia, which has excellent ports and is relatively easy to obtain import coupons, has become the first choice for many Chinese companies to “borrowâ€. However, the frequent “borrowing†of companies and the influx of products made Malaysia quickly enter the eyes of EU investigators. Therefore, the EU’s anti-circumvention investigation of Chinese companies has emerged.
Take the high-end route to survive
At present, the market competition between Chinese fastener companies and foreign counterparts has gradually entered a stage of white-hot. In response to anti-dumping and anti-circumvention investigations in other countries except the EU, how should Chinese fastener companies in trouble meet? In an interview with the author, an official from the Jiangxi Provincial Quality Supervision Bureau gave the answer. In the face of trade barriers, enterprises can gradually shift the focus of product sales to the domestic market, and strive to ease the pressure on overseas exports through the domestic market. According to him, at present, many fastener companies are vigorously developing domestic sales, and the quality of products is more and more in line with national standards. The official also said that in the face of the EU's anti-circumvention investigation, Chinese fastener companies should take the high-end route if they want to survive and develop in the crisis.
According to the author's understanding, as China's fastener industry is a labor-intensive industry, the added value of export products is low. If the technical content is not improved, more trade frictions may be encountered in the future. Therefore, some scholars have suggested that domestic enterprises should make breakthroughs in technology in the future, enhance their core competitiveness, accelerate product structure adjustment and upgrading, and turn cost advantages into innovation advantages.
At the same time, in response to the EU's recent anti-circumvention investigation, the head of the Department of Law and Law of the Ministry of Commerce of the People's Republic of China said: "The Chinese government resolutely opposes any abuse of trade remedy measures and promotes trade protectionism. At a critical moment when the global economy faces challenges and a difficult recovery, The Chinese side believes that the EU should not pursue trade protectionism. The Chinese government has the confidence and determination to safeguard the legitimate interests of China's industry and create a fair trading environment."
Abstract According to the Chinese Ministry of Commerce recently issued a news that the European Union decided to release an official announcement on the Chinese re-exports by Malaysia's exports to the EU fastener products launched anti-circumvention investigation. As the industry's stakeholders worry, a new round of trade friction between China and the EU will come. Following anti-dumping and...